Cultural rule orientation, legal institutions, and the credibility of corporate social responsibility reports

Culture matters for credible corporate social responsibility (CSR) reporting. I show that firms located in countries with stronger cultural rule orientation are more likely to (a) receive assurance on their CSR report, (b) receive assurance from an accounting firm, (c) receive assurance in accordanc...

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Bibliographic Details
Published in:Corporate social-responsibility and environmental management 2021-01, Vol.28 (1), p.310-332
Main Author: Steindl, Tobias
Format: Article
Language:English
Subjects:
Assurance
Comparative analysis
Corporate law
corporate social responsibility
Culture
Economic analysis
legal institutions
Orientation effects
Qualitative analysis
Regression analysis
Robustness (mathematics)
rule orientation
Social responsibility
sustainable development
uncertainty avoidance
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Summary:Culture matters for credible corporate social responsibility (CSR) reporting. I show that firms located in countries with stronger cultural rule orientation are more likely to (a) receive assurance on their CSR report, (b) receive assurance from an accounting firm, (c) receive assurance in accordance with an assurance standard, and (d) receive assurance on their entire CSR report. Path analysis reveals that the direct effect of cultural rule orientation is much stronger than its indirect effect via legal institutions. I confirm the dominance of the direct effect in a qualitative comparative analysis. The economic significance of the direct effect is identified using probit regression analysis. Endogeneity concerns are addressed in a battery of robustness checks. Overall, the findings of this study provide a nuanced understanding of how culture affects credible CSR reporting, which, in turn, has important implications for managers, stakeholders, and policy makers.
ISSN:1535-3966
1535-3958
1535-3966
DOI:10.1002/csr.2051